Rupee reverses gains as shares drop; dlr eyed

The rupee reversed gains in afternoon session on Monday tracking a drop in local shares but the dollar's losses against major currencies prevented it from slipping sharply.

At 2:04 p.m., the partially convertible rupee was at 46.98/99 per dollar, after rising to 46.80, its strongest since July 16. It closed Friday at 46.94/95. Indian shares were trading down 0.6 percent, pulled down by a fall in automaker Maruti which posted a surprise 20 per cent drop in net profit over the weekend. Traders were also watching the dollar's moves versus majors for direction.

The index of the dollar against six major currencies was very choppy. The euro firmed against the dollar on Monday as investors bought into riskier assets, calmed after the release of European banks' stress test results late on Friday.

One-month offshore non-deliverable forward contracts were quoted at 47.18, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 47, with the total traded volume on the two exchanges at about $3 billion.

Source http://economictimes.indiatimes.com/markets/forex/Rupee-reverses-gains-as-shares-drop-dlr-eyed/articleshow/6218902.cms